American Student Assistance

April 03, 2007 11:31 ET

College Seniors: Five Reasons to Stay Awake During Your Student Loan Exit Interview

BOSTON--(Collegiate Presswire - April 3, 2007) - If you're a college senior who's borrowed federal student loans, this month you'll probably be hearing from your Financial Aid Office about something called an Exit Interview. As a federal student loan borrower, you're required to attend the Exit Interview so that you can learn about your repayment rights and responsibilities.

American Student Assistance®, a nonprofit that helps students manage higher education debt, offers a friendly reminder that, in addition to Exit Interview time, April is National Financial Literacy Month and a great time to start thinking about your finances post-graduation. Even though you've got a million other things going on right now, like final exams, graduation and job hunting, don't blow off - or sleep through - this important session. Here are five things to pay special attention to during your Exit:

1. Total balance and monthly payments. At your Exit you'll be given a summary of the total amount you owe (remember to breathe!) and a schedule of estimated payments. Now you can see just how much your student loans will cost you each month and what adjustments you may have to make in your budget.

2. The "Grace Period" for repayment. Student loan repayment for May graduates typically begins after a six-month grace period. November may seem like a long way off, but time flies. Make room in your budget now; don't get caught off-guard when the first student loan bill arrives in the mail.

3. Who you'll be making payment to. The company that collects payment on your student loan (typically called a servicer) will probably send you your first bill or coupon book near the end of your grace period. But if they don't, it's still your responsibility to make payment on time, so hold on to their contact information. If you don't yet know where you're going to live after graduation, make sure that you notify your servicer once you do find permanent housing so they can update their records. Making sure all your creditors have your correct address is the first step to establishing good credit.

4. Your repayment options. Your loans will probably start out with the traditional 10-year repayment term. But if you can't start repayment because you don't find a job or you're continuing your education, you may be able to temporarily postpone payment. Contact your servicer to see if you qualify. If the monthly payment amount is too high, ask about a different repayment plan. Unlike most consumer debt, federal student loans actually give you several different options, from extended repayment, to interest-only payments for the first few years, to an income-sensitive plan or consolidation. You should also ask about interest-rate reductions or other benefits for on-time or automatic payments.

5. Who to call if you have a problem. Missed student loan payments can ruin your credit, make you ineligible for future financial aid, and possibly even stop you from getting a job. If you have a hard time making your monthly payment, tell your servicer. Ignoring the problem and ducking the collection calls will only make things worse. Since you and your servicer both have the same goal of successful repayment, they should work with you to find a solution.

For more information about student loan payment, visit www.amsa.com.

About American Student Assistance

American Student Assistance helps college students and their parents to manage higher education debt successfully. Incorporated in 1956, ASA delivers quality student loan default prevention, guarantee, origination and fund delivery services to students, parents, schools and lenders nationwide. Based in Boston, ASA employs more than 600 associates nationwide. Visit www.amsa.com or call (617) 728-4631 for more information.

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